Calcutta High Court
Bharat Carbon And Ribbon Manufacturing ... vs Sant Nirankari Mondal on 4 July, 2003
Equivalent citations: (2004)1CALLT117(HC), 2004(2)CHN357
Author: A.K. Banerjee
Bench: Ashim Kumar Banerjee
JUDGMENT A.K. Banerjee, J.
1. Appellant, a limited company being the owner of a plot of land situated at B.L. Shah Road, Calcutta entered into an agreement for sale with the respondent, a registered society to sell the said plot of land to the respondent at a sum of Rs. 12.5 lac.
2. The salient feature of the said agreement for sale executed on 13th April, 1981 is as follows:
"4. The vendor shall within one week from the date hereof deliver to the purchaser's advocate M/s. Khaitan & Company of 9, Old Post Office Street, Calcutta against their accountable receipt all original documents of title and other papers relating to the said premises that are in their possession for investigation of title and shall answer all reasonable requisition on title which may be made by the purchaser's said advocate and shall otherwise make out a marketable title to the said premises.
7. The Vendor agrees to obtain the said consents and/or permission and clearance Certificate within a period of eight months from the date of finalization of the draft conveyance and to execute a proper conveyance or conveyances in respect of the said premises in favour of the Purchaser or its nominee or nominees within a further period of 30 days of the receipt of all consents and permission and clearance certificate and simultaneously therewith the Purchaser shall pay the balance of the consideration and/or purchase price to the vendor.
8. The vendor shall at its own cost make out a marketable title to the said premises free from all encumbrances and shall cause all necessary parties, if any, to join in the conveyance.
9. In the unlikely event of any open land not exceeding 20% of the total area comprised in the said premises being held or alleged by the authorities to be vacant land liable to be acquired and/or be acquired under the said let land/or under any other Act or affected by any notice of acquisition or requisition, then and in such event the Vendor shall have the option to call upon the Purchaser to accept the conveyance or conveyances and/or transfer of the remainder of the said premises provided however that the Vendor shall be liable to make a proportionate reduction in the purchase period payable by the Purchaser as herein provided further that for the purpose of proportionate reduction as aforesaid the value of the land and the buildings shall be taken separately as per valuation made by recognized valuers to be mutually agreed upon and reduction will be made on the basis of the value of the land and/or buildings not transferred provided further that if such open lands held or alleged by the authorities to be vacant land exceeds 20% of the total area of the said premises, then and in such event, the purchaser shall have the option either to call upon the vendor to execute the conveyance or conveyances and/or transfer of the remainder of the said premise subject to the vendor making a proportionate reduction in the purchase price as aforesaid, or to terminate this agreement.
10. In case of non-receipt by the Vendor of the permission under the Urban Land (Ceiling & Regulation) Act, 1978 for sale of the said premises within one year from the date hereof this agreement shall stand terminated and the Vendor shall forthwith refused the said earnest money of Rs. 1,00,000/- to the purchaser and this vendor will pay to the purchaser Rs. 500/- (Rupees five hundred) only as the cost charges and expenses incurred by the purchaser for investigation of title and of this agreement and also pay interest on the said earnest money @ 12% per annum.
11. In case after the Vendor's complying with its obligation hereunder and/or being ready and willing and in a position to execute the conveyance or conveyances the purchaser fails or neglect to pay the balance of the consideration and to have executed the conveyance or conveyances as aforesaid then and in such event the Vendor may either sue the purchaser for specific performance and/or damages or terminate this agreement and forfeit the earnest money paid as aforesaid by way of liquidated damages.
12. If after making out a marketable title to the said premises and obtaining the permission under the Urban Land (Ceiling & Regulation) Act, 1976 and the clearance certificate under Section 230A of the Income Tax Act, 1961, the Vendor fails or neglects to complete the transaction the purchaser may either cancel this agreement in which event the vendor will forthwith refund the said earnest money of Rs. 1,00,000/- to the Purchaser and the Vendor will pay interest thereon @ 12% per annum and will also pay Rs. 500/- only as the costs charges and expenses mentioned in Clause 10 hereof or the purchaser may at its option sue the vendor for specific performance of this contract and/or for damages and held the vendor liable for all costs charges and expenses incurred therein.
13. In case however the vendor fails to make out a marketable title to the said premises and/or fails to obtain permission under the Urban Land (Ceiling & Regulation) Act, 1976 or the clearance certificate under Section 120A of the Income Tax Act, 1961 and/or fails to carry out its other obligations herein and on the part of the Vendor to be observed and performed then this agreement shall stand cancelled in which event the Vendor shall forthwith refund to the Purchaser the earnest money paid in terms thereof and the Vendor will pay interest thereon at the rate of 12% per annum and will also pay Rs. 500/- (Rupees five hundred) only as the costs charges and expenses and mentioned in Clause 10 hereof."
3. From the aforesaid clauses of the agreement for sale it would appear that the parties intended to complete the transaction within a time bound period. However, the conduct of the parties which would be discussed shortly hereinafter, would reflect otherwise.
4. There had been series of correspondence exchanged by and between the parties which were discussed by the Court below in detail. We, however, find relevant for the purpose of disposal of the present appeal only those which were exchanged by and between the parties on and from the stage of forwarding the Deed of Conveyance.
5. From the chronological events sit would appear that there had been a contributory delay on both sides in completing the transaction. Hence, even if the agreement for sale stipulated a time bound programme the same had been given a go-by by both the parties. As we have just now said that the conduct of the parties prior to the submission of the draft Deed of Conveyance is not relevant herein we do not wish to deliberate on those issues.
6. By a letter dated 17/20th March, 1982 solicitors for the respondent forwarded a copy of the draft Deed of Conveyance along with three other draft documents for the purpose of approval of the appellant. The said three documents were as follows;
(1) Letter of understanding;
(2) Indemnity Bond;
(3) Power of Attorney.
7. By a letter dated 2nd April 1982 the draft Deed of Conveyance was duly approved by the appellant 6. By a letter dated 2nd April 1982 the draft Deed of Conveyance was duly approved by the appellant through its advocate. The contents of the forwarding letter of approval are quoted below:
"Please refer to your letter No. NM/9/79 dated 1, 1992 received by us today.
We are sending herewith the draft conveyance duly approved by us as mentioned herewith. We however regret to note your client's persistent delay in finalizing the matter and at every stage. Even though the draft Conveyance was to be finalized long ago it was forwarded to us after great delay and even the original title deed required by us for approving the draft Conveyance was returned to us after 6 days.
The draft conveyance has now to be finalized by you pursuant to which our client will have to apply for and obtain necessary clearances. The work appears to be impossible by the 13th April 1982 the stipulated final date.
However, and without prejudice to our client's rights and contentions our clients are proceeding and making their best efforts to obtain the required clearances before the stipulated date."
8. It is significant to note that in the said letter the advocate for the appellant did not raise any objection as to the other three documents.
9. By a subsequent letter issued on April 10, 1982 the advocate for the appellants contended that with regard to the three documents they would revert on receiving instruction. The contents of the said letter dated April 10, 1982 is quoted below:-
"Please refer to your letter date March 12/20, 1982 sending the draft conveyance and 3 other drafts and alleging that our clients have agreed to execute certain other documents.
While we have returned to you the draft conveyance duly approved by us, the other drafts sent by you are still pending, our clients' instructions, inasmuch as we have no knowledge of the alleged agreement about the execution of such documents. We shall revert to you on receiving instruction.
Kindly let us have a formal acceptance of the marketability of our client's title.
We regret to note the delay in our finalizing the deed of conveyance. Please send us a final copy immediately without prejudice to our client's rights and contentions with regard to the extraordinary delay being committed by your client and your client's other defaults."
10. By a letter dated 14/16th April 1982 the final Deed of Conveyance was sent to the appellant for having necessary clearance under the Income Tax Act. The contents of the said letter are set out below:-
"Our clients deny that there was any delay on the part of our clients in finalizing the matter. As a matter of fact our client was all along and still is ready and willing to complete the transaction as early as possible.
We send you herewith one copy of the final Deed of Conveyance to enable your clients to apply for clearance certificate under Section 230A of the Income Tax Act, 1961.
We invite your immediate attention to our letter dated 17/20th March, 1982 under cover whereof we had sent a draft of letter of undertaking, power of attorney and indemnity bond for your approval and return. We regret you have not yet approved and return the same. Since those documents will be executed simultaneously with the Indenture of Conveyance, we would request you to return those drafts duly approved by you at the earliest.
We would further request you to send us the original documents in connection with the above property on our accountable receipt."
11. There had been a complete silence on the said three documents on the part of the respondent for a considerable period.
12. By a letter dated August 10, 1982 the appellant refused to execute the conveyance for the first time which was followed by correspondence of the like nature on 7th October 1982, 8th October 1982 and November 22, 1982. The letters of refusals however were not exhibited by any of the parties before the Court below.
13. Since the appellant refused to execute the conveyance the plaintiff filled a suit in the Court of Assistant District Judge, 7th Bench, Alipore on 10th April, 1984 inter alia praying for specific performance of the said agreement for sale being dated 13th April, 1981.
14. In the written statement filed before the Court below the appellant contended that there had been wilful breach of the terms and conditions of the agreement by and on behalf of the respondent in completing the transaction within the scheduled time. In paragraph 9 of the written statement the defendant contended that the agreement for sale stood terminated in view of the non-receipt of the permission under the Urban Land Ceiling Act within one year from the date of making of the said agreement as also because of wrongful instance by the plaintiff for execution of the said three other documents being the letter of undertaking, power of attorney and indemnity bond.
15. In paragraph 11 of the written statement the defendants craved reference to its letters dated 10th August, 1982, 7th October, 1982, 8th October, 1982 and 22nd November, 1982 for ascertaining the correct terms and scope thereof. It was denied that the plaintiff was ready and willing to perform its part of obligation to complete the transaction.
16. At the hearing before the Court below the following issues were framed:
1. Has the plaintiff any cause of action for this suit?
2. Is the suit maintainable as framed?
3. Is the agreement for sale still subsisting?
4. Is the plaintiff entitled to a decree for specific performance of contract as prayed for?
5. To what other relief, if any, is the plaintiff entitled?"
17. On behalf of the plaintiff one Arjun Singh who introduced himself as Promukh of the Calcutta Unit of the plaintiff adduced evidence and proved the agreement for sale. He also proved the correspondence exhibited on behalf of the plaintiff. He contended that the plaintiff was ready and willing to perform their obligation. In cross-examination the witness consistently deposed that the plaintiff was still ready and willing to perform their obligation under the contract.
18. On behalf of the defendant one Samir Chakraborty, one clerk of the concerned advocate acting on behalf of the appellant adduced evidence. Mr. Chakraborty deposed in Examination-in-Chief that the letter dated 9th April, 1981 was sent to the plaintiffs advocate. He further contended that the letter relating to requisition on title was not sent by him personally. It was sent by their dispatch clerk. He also could not say whether any application for land ceiling permission was made or not.
19. The Court upon perusal of the rival pleadings, exhibits and the evidence came to a finding that there had been contributory negligence by both parties. The court had discussed in details as to who the delay was caused from the very day of execution of the agreement for sale. The Court below also held that the other three documents sent along with the draft deed of conveyance were nothing but supplemental to the deed of conveyance. Court below came to finding that the time was not the essence of contract as would appear from the conduct of the parties. The evidence adduced on behalf of the plaintiff, according to the Court below, was sufficient proof of readiness and willingness of the plaintiff to perform the contract. The suit was therefore decreed accordingly.
20. From the judgment and decree dated 31st August 1987 an appeal was preferred on 21st November 1987 wherein this Court granted stay of operation of the judgment and decree by an order dated 1st December 1987 with a further direction upon the appellant not to alienate the suit premises or change the nature and character thereof. On 2nd July, 1991 the appeal was dismissed for default and the interim order stood vacated. After a lapse of two years the decree was put into execution and by an order dated 31st July, 1993 the executing Court directed execution of the conveyance in favour of the plaintiff being the respondent herein. After a lapse of three years, on 9th August 1994 the appellant made an application for restoration of the appeal. The said restoration application was also dismissed for default on 4th January, 1995. On 6th January, 1995 an application was made by the appellant for restoring the restoration application. By this time the conveyance was executed and registered in terms of the direction of the executing Court on 11th January, 1995.
21. On 2nd November, 1995 the restoration application was allowed and the appeal was restored to be heard on merits.
The appeal thereafter came up for hearing before us and was heard by us on the above mentioned dates.
22. Three points were urged by and on behalf of the appellants:-
(A) The judgment for sale did not speak of execution of three additional documents. Hence, asking for execution of the said three documents was contrary to the agreement.
(B) The ready and willingness of the plaintiff was not proved.
(C) Since the issue pertains to equitable relief the Court while exercising its discretion must take into consideration the delay in asking for specific performance of the agreement for sale. Hence the decree should have been refused because of inordinate delay in approaching the Court of law.
23. Mr. Sudhis Dasgupta, learned counsel appearing on behalf of the appellant in support of his contention relied on the following decisions :-
For A - XIV Indian Appeals 173 (Babu Bindeshri Prasad v. Mahant Jairam Gir) (Md. Ziaul Haque v. Calcutta Vyaper Pratisthan) (Mst. Sahida Bibi v. Golam Muhammad) For B - (N.P. Thrungnanam (dead) by Lrs. v. Dr. R. Jagan Mohan Rao and Ors.) (P.G. Sinha v. Commodore K.C. Chatterjee and Ors.), (His Holiness Acharya Swami Ganesh Dassi v. Sita Ram Thapar) For C - (Punjab Urban Planning & Developing Authority v. Shiv Saraswati Steel Re-rolling Mills) (K.S. Vidyanandam and Ors. v. Vatravan)
24. On behalf of the respondents following points were urged:
(1) There was no attempt on the part of the appellant to contradict case of the plaintiff. No witness was called for. The only witness had proved a letter sending the requisition on title which had no relevance at all. The defendant's case was not proved by any oral or documentary evidence.
(2) There had been discussion subsequent top the execution of the agreement with regard to execution of the additional documents. There was no controversy at all on the question of Urban Land Ceiling Act as being highlighted now.
(3) The only ready and willingness was proved. Hence, the contention of the defendant to the said effect was not tenable. It was further contended that the entire amount was deposited in Court at the time of execution of the document which would show that the respondent had money. Section 16 of the Specific Relief Act was relied on in this regard. Explanation of the said section provides for actual tender of the money, if so directed by the Court. There was no proper issue framed on that score. No appropriate suggestion was given to the plaintiffs witness to the said effect. Reliance had been placed on the decision reported in AIR 1999 Supreme Court, 3021 to the effect that a subsequent tender of the entire purchaser consideration exhibits willingness on the part of the plaintiff to performs his obligation.
(4) The facts of the case would depict that the discretionary relief should have been granted and had been granted very rightly taking into account the past conduct of the appellant.
Let us first discuss the cases cited by the parties.
A. Execution of Additional Documents:
(i) XIV Indian Appeal 1733 (Babu Bindeshri Prasad v. Mahant Jairam Gir) pages 2 to 6: In this cases the subordinate judge refused specific perform on the ground that failure on the part of the purchaser to pay the balance money within the stipulated time was fatal to the plaintiff suit. The High Court on appreciation of the evidence came to a conclusion that the agreement between the parties was different from that which was stated in writing. However, the High Court on appraisal of evidence found it not a proper case for decree for specific performance,. The judicial committee while considering this aspects came to conclusion that the plaintiff was insisting upon some covenants which he was not entitled to and thereby delayed performing his part of the agreement for payment of the purchased money on that account and thus the order rejecting the specific performance was upheld.
(ii) (Md. Ziaul Haque v. Calcutta Vyaper Pratisthan) ; In this single bench decision of this Court it was held that the plaintiff has to prove his readiness and willingness to perform the agreement.
(iii) (Mst. Sahida Bibi v. Golam Muhammad) pages 18 to 20: In this judgment the Division Bench of this Court held that when the plaintiff was at variance with the real contract regarding payment of the balance amount the readiness and willingness is not proved and he is not entitled to specific performance.
25. The aforesaid three decisions were cited by the respondents in support of their contention that there had been variance of the contract suggested by the plaintiff which is fatal. The propositions of law laid down by the aforesaid judgments are well settled principles of law. The applicability of the same in the instant case is however doubted. Three additional documents sent by the plaintiff were all related to an additional protection to the plaintiff against any damages which might suffer because of the land ceiling problem. Under the agreement the defendant was bound to make out a marketable title. The plaintiff was also entitled to get his title perfected. Hence, asking for execution of the said three documents was not in variance of the original contract. From the exhibits it would appear that the defendant did not object to those at the relevant time.
B: Readiness and Willingness:
(i) [N.P. Thrungnanam (dead) by Lrs. v. Dr. R. Jagan Mohan Rao and Ors.) : It was held by the apex court in this case that the continuous readiness and willingness on the part of the plaintiff is a condition president to grant relief of specific performance.
(ii) (P.G. Sinha v. Commodore K.C. Chatterjee and Ors.) The division bench of this court held that in a suit for specific performance readiness and willingness must be proved.
(iii) (His Holiness Acharya Swami Ganesh Dassji v. Sita Ram Thapar) : The High Court refused prayer for specific performance on the ground that the plaintiff was not ready nor he had in capacity to perform the contract as he had no financial capacity as come out in the evidence. The apex court affirmed the judgment of the High Court,
(iv) (Syed Dastagir v. T.R. Gopalkrishna Setty): In the instant case the Supreme Court held that subsequent tender of the entire purchase consideration exhibits willingness on the part of the plaintiff to perform his obligation.
26. From the first three judgments referred to (supra) the proposition of law evolves that proof of readiness and willingness is condition precedent in granting relief for specific performance. In the fourth case the apex Court considered the factum of tendering the entire consideration in Court as a proof of readiness and willingness. In the instant case the plaintiff deposed that he had sufficient money. No challenge was thrown to the same. Even if we assume that mere statement was not sufficient to discharge such onus on the part of the plaintiff the subsequent factum of deposit of the entire money in executing court can not be overlooked by us at the appellate stage.
C. Delay:
(i) (Punjab Urban Planning & Developing Authority v. Shiv Saraswati Iron & Steel Re-rolling Mills) . This judgment has no relevance on the subject.
(ii) (K.S. Vidyanadam and Ors. v. Vairavan) : When the time was not the essence of contract the suit for specific performance could be filed within three years. Even then the apex Court held that while exercising discretion the Court should look into whether such suit was filed within a reasonable time. In the instant case it is true that the plaintiff approached the Court of law at a belated stage. In any event the suit was well within the period of limitation. Such delay in the facts and circumstances can not deny the relief prayed for by the plaintiff. In other words such delay was not fatal to the plaintiff in getting the decree for specific performance.
27. Relief for specific performance is a discretionary relief. Hence, the court has to exercise its judicial discretion taking a sum total of the situation. The facts would reveal that soon after the execution of the agreement for sale on one pretext or the other the parties contributed delay in finalization of the transaction. Such delay was waived by each other when the draft conveyance was sent by the purchaser to the vendor and in turn had been approved by the vendor and sent to the purchaser without any condition being imposed. The dates of sending the draft conveyance and approval thereof are very much important to note. On 13th April, 1982 the time of the said agreement was to expire. Parties knew it. Even on 2nd April, 1982 just 11 days before the expiry of the said period the draft conveyance was approved and returned by the vendor with assurance to give "best efforts" to obtain necessary clearance under the Income Tax Act. Even after 13th April, 1982 nothing had come out in the evidence to show as to how that "best efforts" had been made by the vendor to justify their claim to the effect that agreement stood terminated on the said date, i.e. 13th April 1982. There was another salient feature. On 14th April, 1982 when the final Deed of Conveyance was sent for necessary income tax clearance the vendor did not object and did not return the same by saying that the agreement stood terminated by efflux of time. According to the vendor being the appellant herein, there was a meeting held on 18th June, 1982 wherein the appellant assured the respondents that there had been no excess land which goes to suggest that even on 18th June, 1982 the parties did not accept the termination by efflux of time. For the first time on 10th August 1982 the appellant refused execution of the conveyance, on what ground we do not know in view of the fact that the defendant although craved reference to the said documents in the written statement, did not produce the said documents as exhibits. From the aforesaid facts it would appear that the time was not the essence of the said contract as understood by the parties on the relevant date.
28. Let us now examine the evidence adduced by the parties. On behalf of the plaintiff being the respondent the agreement for sale was proved. Definite assertion was made as to ready and willingness. No suggestion was given to the plaintiff witness to the effect that the agreement stood terminated by efflux of time. The case of the defendant was not put to the plaintiffs witness for contradiction. The plaintiff by sending the final deed of conveyance to the defendants was proved. Categoric assertion was made by the witness that the plaintiff had money in the bank to complete the transasction. The primary onus of the plaintiff was thus discharged.
29. The defendant being the appellant herein did not make any attempt at all to discharge the onus shifted upon it. The burden of proof of the defendant was not at all discharged. The only witness adduced on behalf of the defendant was not witness at all on the subject issue. The clerk of the advocate only proved the letter forwarding the requisition on title which was an admitted fact. Nothing turns on that. The defendant's categoric case made out in the written statement to the effect that the agreement for sale stood terminated by efflux of time and the defendant had performed all its obligations under the contract were not proved. For all practical purposes it was an ex parte hearing. Assuming that the plaintiff did not prove his readiness and willingness, can the decree for specific performance being a discretionary relief be refused in the facts and circumstances? The answer is "no" in view of the conduct of the parties as discussued herebefore.
30. Defendant being the owner of the land was obliged to made out a good marketable title to complete the transaction. Three additional documents which were insist upon by the plaintiff were needed to protect the purchaser from any future complication in the event of vesting of excess land upon the State. It reveals from the fact that although the vendor being the appellant herein contended that they had no excess land a return under Section 6 of the Urban Land Ceiling Act was filed by the appellant. These were nothing but supplemental to the Deed of Conveyance. These convenant could have been inserted in the conveyance itself. However, the parties thought it fit to have a discussion on that as it came out from evidence and pleadings.
31. The conduct of the defendant even at the appellate stage is also relevant herein to decide the present issue. The appeal was dismissed for default in 1991. The appellant did not take any steps at all for about two years. When the deceree was put into execution even then the appellant allowed the restoration application to be dismissed for default. The appellant allowed the dercree to be executed. Entire money was deposited by the plaintiff and the conveyance had been executed and registered. These are facts which would show that the discretion must be exercised as against the appellant. It might be true that the order of dismissal was recalled by this Court. However, it was recalled at a stage when the decree had already been executed.
32. Considering the above we hold that the decree so passed by the Court below was just and appropriate and we do not wish to inferfere with the same.
In the result the appeal fails and is hereby dismissed.
There would be no order as to costs.
S. Banerjea, J.
33. I agree.